Correlation Between Jentech Precision and Yusin Holding

Can any of the company-specific risk be diversified away by investing in both Jentech Precision and Yusin Holding at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Jentech Precision and Yusin Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jentech Precision Industrial and Yusin Holding Corp, you can compare the effects of market volatilities on Jentech Precision and Yusin Holding and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Jentech Precision with a short position of Yusin Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jentech Precision and Yusin Holding.

Diversification Opportunities for Jentech Precision and Yusin Holding

0.05

Correlation Coefficient

Jentech Precision  Yusin Holding

Significant diversification

The 3 months correlation between Jentech and Yusin is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Jentech Precision Industrial and Yusin Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yusin Holding Corp and Jentech Precision is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Jentech Precision Industrial are associated (or correlated) with Yusin Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yusin Holding Corp has no effect on the direction of Jentech Precision i.e., Jentech Precision and Yusin Holding go up and down completely randomly.

Pair Corralation between Jentech Precision and Yusin Holding

Assuming the 90 days trading horizon Jentech Precision Industrial is expected to under-perform the Yusin Holding. In addition to that, Jentech Precision is 2.29 times more volatile than Yusin Holding Corp. It trades about -0.01 of its total potential returns per unit of risk. Yusin Holding Corp is currently generating about -0.02 per unit of volatility. If you would invest  13,650  in Yusin Holding Corp on December 2, 2024 and sell it today you would lose (400.00) from holding Yusin Holding Corp or give up 2.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Jentech Precision Industrial  vs.  Yusin Holding Corp

Jentech Precision

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jentech Precision Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Jentech Precision is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Yusin Holding Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Yusin Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Yusin Holding is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Jentech Precision and Yusin Holding

The main advantage of trading using opposite Jentech Precision and Yusin Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jentech Precision position performs unexpectedly, Yusin Holding can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Yusin Holding will offset losses from the drop in Yusin Holding's long position.

The idea behind Jentech Precision Industrial and Yusin Holding Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.